Stakeholders vs Shareholders

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Week 2—Stakeholders vs. Shareholders As I read the chapter, I found myself in a bit of a quandary as to which is right. I suspect others feel the same way which is why there is not a definite right or wrong way to make decisions. Shareholders need to be considered as a business makes decisions and policies. Without shareholders, many companies would not exist. The financial being of a corporation starts with shares. Few companies operate with the philosophy of losing money. With that in mind, I believe the shareholders will always be taken care of. However, corporations also need to look at their footprint on the world. I feel that society is steering away from operating purely to make a profit. In my mind, the shareholder model is a selfish model that only looks at what is best for the elite at the top of the ownership ladder. A corporation has to look at the stakeholders. Stakeholders have more influence on decisions today that ever before. If all decisions are based solely on keeping the shareholders happy, a company may not always be profitable or ethical. Decisions made in the best interest of management may not be the best for other stakeholders. Employees have a different perspective on how things should be done. Customers want something else again. The logical sequence is to keep stakeholders happy which will increase business, increase profits and reward the shareholders. Our society has become incredibly conscious of so many issues and society expects corporations to do right by them. That decision might work most of the time, however, sometimes a decision that favors the society may hinder profits. In that case, the shareholders might not be so happy. It appears to me that every corporation needs a blend of shareholder based and stockholder based decisions. Neither is good all by itself but together, the company will come out ahead and everyone wins.
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